Form 8-K - Current report

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): December 11, 2024

 

SmartKem, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware	001-42115	85-1083654
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

 

Manchester Technology Center, Hexagon Tower

Delaunays Road, Blackley

Manchester, M9 8GQ U.K.

(Address of principal executive offices, including zip code)

 

011-44-161-721-1514

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of exchange on which registered
Common Stock, par value $0.0001 per share		SMTK		The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b - 2 of the Securities Exchange Act of 1934 (§240.12b - 2 of this chapter).

 

Emerging growth company x

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

  

 

 

 

 

 

Item 3.03

Material Modification to Rights of Security Holders.

 

The description of the terms of the Certificate of Amendment under Item 5.03 is incorporated herein by reference.

 

Item 5.03

Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

On December 11, 2024, SmartKem, Inc. (the “Company”) entered into a consent agreement (the “Consent Agreement”) with certain holders (the “Consenting Holders”) of the Company’s Series A-1 Convertible Preferred Stock, stated value $10,000 per share (the “Series A-1 Preferred Stock”). Pursuant to the Amended and Restated Certificate of Designation of Preferences, Rights and Limitations for the Series A-1 Preferred Stock, dated January 29, 2024 (the “Certificate of Designation”), the Series A-1 Preferred Stock was to begin accruing dividends on the 18^th month anniversary of the Closing Date (as defined in the Certificate of Designation), or December 14, 2024, if the trailing 30-day VWAP was less than the then in effect conversion price of the Series A-1 Preferred Stock (the “Series A-1 Dividend”). Pursuant to the Consent Agreement, the Consenting Holders agreed to amend the Certificate of Designation such that the Series A-1 Dividend will not begin accruing until January 31, 2025 (the “Amendment”).

 

On December 11, 2024, the Company filed a Certificate of Amendment to the Certificate of Designation with the Secretary of State of the State of Delaware (the “Certificate of Amendment”) to effect the Amendment.

 

The Consent Agreement and the Certificate of Amendment are attached as Exhibits 10.1 and 3.1 hereto, respectively. The summaries above are not intended to be complete and are qualified in their entirety by reference to such exhibits.

 

Item 9.01

Financial Statements and Exhibits.

 

(d) The following exhibit is furnished with this report:

 

Exhibit No.		Description
3.1		Certificate of Amendment to Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series A-1 Preferred Stock
10.1		Consent Agreement, dated December 11, 2024, between the Company and the Consenting Holders
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

 

 

 Signature

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	SMARTKEM, INC.
Dated: December 12, 2024	By:	/s/ Barbra C. Keck
		Barbra C. Keck
		Chief Financial Officer

 

 

 

Exhibit 3.1

 

SMARTKEM, INC.

CERTIFICATE OF AMENDMENT

TO

AMENDED AND RESTATED

CERTIFICATE OF DESIGNATION OF

PREFERENCES, RIGHTS AND LIMITATIONS

OF

SERIES A-1 CONVERTIBLE PREFERRED STOCK

 

PURSUANT TO SECTION 242 OF THE

DELAWARE GENERAL CORPORATION LAW

 

The undersigned, Ian Jenks and Barbra Keck, do hereby certify that:

 

1.                   They are the Chairman and Secretary, respectively, of SmartKem, Inc., a Delaware corporation (the “Corporation”).

 

2.                   This Certificate of Amendment (the “Certificate of Amendment”) amends the provisions of the Corporation’s Amended and Restated Certificate of Designation of Preferences, Rights and Limitations of Series A-1 Convertible Preferred Stock filed with the Secretary of State of the State of Delaware on January 29, 2024 (the “Certificate of Designation”).

 

3.                   The first sentence of Section 3(b) of the Certificate of Designation is amended and restated in its entirety as follows:

 

“In the event that on January 31, 2025, the trailing 30-day VWAP is less than the then in effect Conversion Price, the Series A-1 Preferred Stock shall begin accruing dividends at the annual rate of 19.99% of the Stated Value (the “Series A-1 Dividend”).”

 

4.                   This amendment was duly adopted in accordance with the provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware.

 

5.                   All other provisions of the Certificate of Designation shall remain in full force and effect.

 

 

[Signature Page Follows]

 

 

1

 

 

 

IN WITNESS WHEREOF, the undersigned have executed this Certificate of Amendment on this 11^th day of December, 2024.

 

/s/ Ian Jenks		/s/ Barbra Keck
Name: Ian Jenks		Name: Barbra Keck
Title: Chairman		Title: Secretary

 

2

 

Exhibit 10.1

 

CONSENT AGREEMENT

 

 

This Consent Agreement (this “Agreement”), dated as of December 11, 2024, is entered into among SmartKem, Inc., a Delaware corporation (the “Company”), and the Holders identified on the signature pages hereto (including their respective successors and assigns, the “Consenting Holders”).

 

WHEREAS, as of the date hereof, the Company has issued and outstanding 856 shares of Series A-1 Convertible Preferred Stock, Stated Value $10,000 per share (the “Series A-1 Preferred Stock”), the preferences, rights and limitations of which are set forth in an Amended and Restated Series A-1 Certificate of Designation, dated January 29, 2024 (the “CoD”) (capitalized terms used herein have the respective meanings ascribed thereto in the CoD unless otherwise defined herein);

 

WHEREAS, Section 4 of the CoD provides that the powers, preferences or rights given to the Series A-1 Preferred Stock may not be altered or changed without the affirmative vote of the Holders of a majority of the then outstanding shares of the Series A-1 Preferred Stock which must include AIGH Investment Partners LP and its Affiliates (“AIGH”) for so long as AIGH is holding at least $1,500,000 in aggregate Stated Value of Series A-1 Preferred Stock acquired pursuant to the Purchase Agreement;

 

WHEREAS, the Consenting Holders hold at least a majority of the outstanding shares of Series A-1 Preferred Stock and include AIGH; and

 

WHEREAS, the Company and the Consenting Holders desire to amend the CoD.

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants, and agreements contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each Consenting Holder hereby agree as follows:

 

1.                   Amendment to Certificate of Designation. The Consenting Holders hereby irrevocably consent to the Amendment to the Amended and Restated Series A-1 Certificate of Designation in the form annexed hereto as Exhibit A (the “Amendment”).

 

2.                   Notice to Other Holders; Public Disclosure. Within one (1) Trading Day after the filing of the Amendment with the Secretary of State of the State of Delaware, the Company shall provide written notice of the Amendment to the Holders who are not Consenting Holders. Within four (4) business days after the date hereof, the Company shall file a Current Report on Form 8-K with the Securities and Exchange Commission, disclosing the Amendment and this Agreement, each of which shall be an exhibit to such filing.

 

3.                   Counterparts/Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.

 

4.                   Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes any prior support or other agreements between the Holder and the Company with respect to the subject matter hereof.

 

 

 

 

5.                   Governing Law. This Agreement and the performance under this Agreement, and all suits and special proceedings under this Agreement, shall be governed by the choice of law/forum selection in the Purchase Agreement.

 

6.                   Severability. In the event that any of the provisions of this Agreement are held to be invalid or unenforceable in whole or in part, all other provisions will nevertheless continue to be valid and enforceable with the invalid or unenforceable parts severed from the remainder of this Agreement.

 

 (Signature Pages Follow)

 

-2-

 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Consent Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

 

 

SMARTKEM, INC.

 

By:	/s/ Barbra Keck
	Name:  Barbra Keck
	Title:    Chief Financial Officer

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE PAGE FOR CONSENTING HOLDER FOLLOWS]

 

-3-

 

 

 

[CONSENTING HOLDER SIGNATURE PAGES TO SMARTKEM, INC.

CONSENT AGREEMENT]

 

IN WITNESS WHEREOF, the undersigned has caused this Consent Agreement to be duly executed by its authorized signatory of the date first indicated above.

 

Name of Consenting Holder: AIGH Investment Partners, LP

 

Signature of Authorized Signatory of Consent Holder: /s/ Orin Hirschman

 

Name of Authorized Signatory: Orin Hirschman

 

Title of Authorized Signatory: Manager, AIGH Capital Management, LLC

 

-4-

 

 

 

[CONSENTING HOLDER SIGNATURE PAGES TO SMARTKEM, INC.

CONSENT AGREEMENT]

 

IN WITNESS WHEREOF, the undersigned has caused this Consent Agreement to be duly executed by its authorized signatory of the date first indicated above.

 

Name of Consenting Holder: WVP Emerging Manager Onshore Fund, LLC – AIGH Series

 

Signature of Authorized Signatory of Consent Holder: /s/ Orin Hirschman

 

Name of Authorized Signatory: Orin Hirschman

 

Title of Authorized Signatory: Manager, AIGH Capital Management, LLC

 

-5-

 

 

 

[CONSENTING HOLDER SIGNATURE PAGES TO SMARTKEM, INC.

CONSENT AGREEMENT]

 

IN WITNESS WHEREOF, the undersigned has caused this Consent Agreement to be duly executed by its authorized signatory of the date first indicated above.

 

Name of Consenting Holder: WVP Emerging Manager Onshore Fund, LLC – Optimized Equity Series

 

Signature of Authorized Signatory of Consent Holder: /s/ Orin Hirschman

 

Name of Authorized Signatory: Orin Hirschman

 

Title of Authorized Signatory: Manager, AIGH Capital Management, LLC

 

-6-

 

 

 

[CONSENTING HOLDER SIGNATURE PAGES TO SMARTKEM, INC.

CONSENT AGREEMENT]

 

IN WITNESS WHEREOF, the undersigned has caused this Consent Agreement to be duly executed by its authorized signatory of the date first indicated above.

 

Name of Consenting Holder: AIGH Investment Partners, LLC

 

Signature of Authorized Signatory of Consent Holder: /s/ Orin Hirschman

 

Name of Authorized Signatory: Orin Hirschman

 

Title of Authorized Signatory: Manager

 

 

-7-

 

 

Exhibit A

 

Form of Amendment

 

-8-

 

 

 

 

 

 

Cover	Dec. 11, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 11, 2024
Current Fiscal Year End Date	--12-31
Entity File Number	001-42115
Entity Registrant Name	SmartKem, Inc.
Entity Central Index Key	0001817760
Entity Tax Identification Number	85-1083654
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	Manchester Technology Center, Hexagon Tower
Entity Address, Address Line Two	Delaunays Road
Entity Address, Address Line Three	Blackley
Entity Address, City or Town	Manchester
Entity Address, Country	GB
Entity Address, Postal Zip Code	M9 8GQ
City Area Code	011-44-161
Local Phone Number	721-1514
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	SMTK
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false

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